Aggregate Industries builds profits

Quarrying-to-concrete group Aggregate Industries today said first half profits had risen despite the weakening US dollar, higher oil prices and reduced UK infrastructure business.

Aggregate, whose British operation is based in Coalville, Leicestershire, said interim pre-tax profits increased by 11% to £44.6m (€67.5m) from £40.2m (€60.8m) previously.

The company said US operating profits had increased due to cash from acquisitions and better weather in the first quarter than at the same time in 2003.

It added that its UK business continued to benefit from its northern concentration, although first half operating profits fell by 3.5% to £46.6m (€70.5m) after a slower first quarter.

Aggregate’s group chief executive Peter Tom described the overall improvement in profits as satisfactory.

“We remain on course to make further progress for the year as a whole,” he said.

Across the UK and the US, Aggregate runs 142 quarries with more than 4.4 billion tonnes of reserves, 164 ready-mixed concrete plants, 90 asphalt plants and 32 pre-cast concrete factories.

In the UK, the group’s operation includes Bradstone garden stone products, its Charcon hard landscaping business and the Masterblock concrete block division.

It said overall UK turnover declined to £313m (€473.6m) from £325m (€491.8m) after a slack start to 2004, with delays to a number of highway maintenance schemes, particularly in the Midlands.

Operations in the north, Scotland and the south west experienced firm trading conditions.

Trading in UK aggregates and asphalt was expected to remain broadly at current levels, while the ready-mixed concrete market would stay competitive in the second half.

However, Bradstone, Charcon and Masterblock were now making a significant contribution to UK results and were expected to continue to deliver a solid performance.

In the United States, all regions had “more normal” weather in the first six months, particularly in the seasonally low first quarter, when sales volumes and trading results were ahead of 2003.

“We expect second half performance on a like-for-like basis to show further improvement over the dollar results achieved during the second half of 2003,” it said of the US business.

The interim dividend per share increased by 5.3% to 1.19p from 1.13p.